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* Ex-regulator Sants to lead review of UK competitiveness
* Banks move operations out of UK, deferring investment -BBA
By Thomas Atkins and Anjuli Davies
FRANKFURT/LONDON, May 19 (Reuters) - A number of banks haveput off possible investments in Britain until after a referendumon its future in the European Union, a lobby group said onTuesday, after Deutsche Bank revealed it was considering cuttingdown its UK operations should the country pull out.
With banks complaining about uncertainty on the EU questionand "punitive" tax increases, the British Bankers' Associationalso said a former financial regulator would lead a review ofBritain's competitiveness on behalf of the industry and reportto the government.
Prime Minister David Cameron has promised to renegotiateBritain's relationship with the EU and then hold the referendumby the end of 2017 on whether to stay in the bloc or leave.
Deutsche Bank, the euro zone's second-largestbank by assets and which has almost 9,000 staff in Britain, hasformed a working group to consider moving some operations toGermany or elsewhere in the euro zone in case of a "Brexit", aspokeswoman for the bank said.
It is not the only one to rethink its operations, accordingto the BBA, which lobbies on behalf of UK and internationalbanks.
"Some banks have recently moved operations and jobs out ofthe UK due to punitive hikes in bank taxes. Other banks havedeferred decisions about whether to invest in Britain untilafter the referendum," said BBA Chief Executive Anthony Browne.
The BBA said Hector Sants, who led the now defunct FinancialServices Authority, and consultancy Oliver Wyman should deliver their competitiveness report to the government with a series ofrecommendations in the autumn.
Goldman Sachs, JPMorgan, Bank of America Merrill Lynch andMorgan Stanley said they had not made any formal contingencyplans for an EU departure. However, banks with large operationsin Britain are expected to begin examining the implications andwhether this might limit Britain's access to its largest tradingpartners in Europe.
Deutsche Bank's working group - which includes executives instrategy, risk, UK management and research divisions - willexamine different Brexit scenarios and their implications forthe bank's large business in Britain, the spokeswoman said.
Deutsche has 16 locations in Britain, down from 21 fiveyears ago. Its presence in Britain since dates back to 1873.
Bank of England Governor Mark Carney said last week it wasimportant that the British government provide clarity on how itwill proceed with the referendum, which could be held as soon asnext year.
A Downing Street spokesman had no immediate comment.
HSBC is also reviewing whether it should move itsheadquarters from London and has said it would make its decisionin a few months. If it moves it would most likely be to HongKong, where it was based before moving to London in 1993.
Speaking to Reuters last week, HSBC Chairman Douglas Flintsaid the uncertainty of the vote could impact investment plansacross the banking sector.
"Our economic analysis says that the balance of advantagelies with staying in Europe and working within Europe to make itmore competitive. More stability and certainty is better foreconomic progress, because people can make decisions if they canforesee what the framework of policy is going to be," Flintsaid. (Additional reporting by William James and Steve Slater;Editing by Giles Elgood and David Stamp)
